By Reshma Kapadia

The Czech National Bankcut its repo rate by 25 basis points to 0.25% and cut its Lombard rate and deposit rate –mostly in line with expectations. The move effectively creates a zero policy rate, which means it can’t really cut rates further. The bank also expects inflation to decelerate further with downside risks.

Barclays says in a research note the next move to loosen monetary policy is through weakening the currency. As a result, strategists expect unsterilized forex purchases and other untraditional measures as the eocnomic recession continues.

Reuters offers highlights of a press conference with Czech central bank Governor Miroslav Singer. Some tidbits from the briefing:

“We are having an analysis done whether interest rates must stay in a positive territory at very low levels technically and legally, of whether they can go to zero. It seems there are not many obstacles if rates went to zero. Perhaps there might be obstacles for negative levels. From this point of view you should not perceive the discount at 0.1 as some bottom border.”

About Emerging Markets Daily

Emerging markets have been synonymous with growth, but the outlook for individual nations is constantly changing. Countries from Brazil and Russia to Turkey face challenges including infrastructure bottlenecks, credit issues and political shifts. The Barrons.com Emerging Markets Daily blog analyzes news, data and research out of emerging markets beyond Asia to help readers navigate the investment landscape.

Barron’s veteran Dimitra DeFotis has been blogging about emerging market investing since traveling to India and Turkey. Based in New York, she previously wrote for Barron’s about U.S. equity investing, including cover stories and roundtables on energy themes. Dimitra was among the first digital journalists at the Chicago Tribune and started her career as a police reporter at the Daily Herald in the Chicago suburbs. Dimitra holds degrees from the University of Illinois and Columbia University, where she was a Knight-Bagehot Fellow in the business and journalism schools.